Q2 2024 Veralto Corp Earnings Call Transcript
Key Points
- Veralto Corp (VLTO) delivered strong core sales growth of 3.8% year-over-year, exceeding guidance expectations.
- The company expanded its adjusted operating profit margin by 70 basis points to 24%, reflecting strong operational leverage and cost optimization.
- Recurring revenue grew mid-single digits year-over-year, comprising 62% of total sales, indicating a stable revenue stream.
- Veralto Corp (VLTO) raised its full-year adjusted EPS guidance, showcasing confidence in its market outlook and execution capabilities.
- The company is capitalizing on secular growth drivers in water quality and industrial markets, with strong demand for water treatment solutions and UV systems.
- Currency fluctuations posed an 80 basis points headwind to sales growth, impacting overall revenue performance.
- The divestiture of Salsnes and strategic exits in the water quality segment created headwinds to core growth.
- Free cash flow was down from the prior year due to standalone public company costs and cash tax payments.
- Sales in Western Europe were flat year-over-year, indicating challenges in achieving growth in this region.
- The company anticipates no meaningful recovery in the Chinese market this year, with funding constraints in state-owned municipalities.
My name is Leo, and I will be your conference operator this morning. At this time, I would like to welcome everyone to Veralto Corporation's second-quarter 2024 conference call. (Operator Instructions) I will now turn the call over to Ryan Taylor, Vice President of Investor Relations. Mr. Taylor, you may begin your conference.
Good morning, everyone, and thanks for joining us on the call. With me today are Jennifer Honeycutt, our President and Chief Executive Officer; and Sameer Ralhan, our Senior Vice President and Chief Financial Officer. Today's call is simultaneously being webcast. A replay of the webcast will be available on the Investors section of our website later today under the heading Events and Presentations. A replay of this call will be available until August 9.
Before we begin, I'd like to highlight a few recent disclosures. On July 24, we issued our 2024 sustainability report. That report can be viewed on our main website under Sustainability or on our investor website under Corporate Governance.
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